Money & Company

Tracking the market and economic trends
that shape your finances.

« Previous Post | Money & Company Home | Next Post »

Michael Hiltzik: The oil slick reaches California

May 11, 2010 |  3:44 pm

Very little is simple in this world -- a truism that seems to become more true every day. Financial regulators still have no idea what caused the market's paroxysm nearly a week ago. No one has yet come up with an adequate description of what Goldman Sachs traders contribute to the economy, or why Donald Trump still gets television deals.

Then there's the Gulf of Mexico oil spill. Oil industry executives are already pointing fingers of blame at one another, while, by the way, efforts to contain the damage are faltering. As my Wednesday column reports, among the disaster's victims is an agreement that would have reduced the number of dangerous rigs operating off the California coast. Political leadership might have saved the agreement, but this is California, where political posturing is abundant but leadership's in short supply.

The column begins below.

It isn’t just the waters of the Gulf of Mexico that have been turned murky by the Deepwater Horizon oil spill.

Consider its impact on California’s offshore waters. Specifically, an undersea formation in the Santa Barbara Channel known as Tranquillon Ridge.

During the last couple of years, three Santa Barbara environmental groups worked out a deal with a big offshore drilling company under which the driller would dismantle four offshore rigs under federal jurisdiction in return for the right to extend its drilling temporarily into state waters.

The deal was highly controversial — in fact, an earlier version was rejected last year by the State Lands Commission. But it was supported by a number of environmental groups around Santa Barbara and by Gov. Arnold Schwarzenegger, who seemed to think the trade-off was worthwhile.

Then came the gulf spill, and the governor bailed. Now the T-Ridge deal looks to be dead in the, er, water, evidently because making any sort of deal associated with oil drilling just looks bad. But is the net result for California a loss?

Read the whole column.

-- Michael Hiltzik